Dubai apartment rents rise by up to 25% in some areas

Rents in most areas of Dubai are growing at a double-digit rate, led by Dubai Marina, Jumeirah Breach Residence, Jumeirah Lake Towers and Palm Jumeirah.

Interestingly, rents in affordable areas such as Deira, Dubai Sports City and Jumeirah Village are also rising at a double digit rate as the population continues to grow with more and more job seekers looking for more pasture. greens.

Real estate analysts expect rents to continue rising for the rest of this year, albeit at a slower pace, and reach 2014 levels by the end of 2022.

According to a study published by Asteco, Dubai Marina saw its rentals increase by 25% in the first quarter compared to the same period last year, followed by Palm Jumeirah, Jumeirah Beach Residence and Jumeirah Lake Towers at 22% and Jumeirah Village Circle and Greens at 21%.

Meanwhile, affordable areas such as Deira, Dubai Sports City and Jumeirah Village saw an 11%, 15% and 21% increase in rentals respectively. While Discovery Gardens and International City recorded respective increases of 2% and 5%.

Most of the demand for property has been seen in the mid- to high-end segment, but steady demand for rental properties is now shifting to affordable areas, along with continued economic reforms and visas that are attracting young professionals and high net worth individuals to the emirate. According to the latest data from the Dubai Statistics Centre, Dubai’s population has grown by more than 100,000 since 2020, crossing the 3.5 million mark for the first time in April.

“Average rental rates for apartments and villas continued to grow in the first quarter of 2022, particularly in quality developments, with quarterly increases of 4% and 5%, respectively. Rental rates in all major asset classes are still expected to rise for good quality properties, but at a slower pace,” he said.

Taimur Khan, head of research for Mena at CBRE in Dubai, said average rents in the 12 months to April 2022 had increased by 16.2%, with average rents for apartments and villas increasing by 15.1 respectively. % and 23.5%.

Prathyusha Gurrapu, head of research and advisory at Core, added that apartments in Palm Jumeirah continue to dominate with a rental peak of 38% year-on-year, followed by Dubai Marina (34%) and The Greens and The Views. (24 percent).

Gurrapu added that while improving at a record pace, these rents are still below the peak values ​​of 2014, with villas lagging by 16% and apartments by 33%.

“However, we expect that at the current rate, rents in the city-wide villa market will reach the 2014 mark by the end of this year and apartment rents will follow. We see many tenants trying to find support from the Rera rental index to avoid the steep increases that landlords are asking for on renewals.However, new leases are dictated by market conditions with many landlords, particularly units in apartment buildings and desirable neighborhoods that achieve asking prices,” she added.

Asteco noted that rental rates across all major asset classes are expected to increase further for good quality properties, albeit at a slower pace.

“However, the underlying supply and demand fundamentals could hamper continued growth in the real estate market. A major concern with oversupply will be tenant retention amid increasing competition, as well as attracting new tenants. There is a fundamental need for wealth-creating industries in order to generate more jobs and business opportunities and increase the population of the emirate,” he said. declared.

Copyright © 2022 Khaleej Times. All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

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